O'Connor spawns another hedge fund: Satori

The O'Connor asset management business of UBS AG in Chicago has been birthing hedge funds and trading firms for more than a decade, and it's about to deliver another one.

Satori Investment Partners LLC, led by four former top O'Connor executives, is raising money from investors and plans to formally launch by October with about $250 million in assets under management, said Rich Excell, who will serve as the hedge fund's chief investment officer.

The O'Connor unit was previously known as O'Connor & Associates before it was bought in 1992 by Swiss Bank Corp., which in turn was acquired in 1998 by UBS, now Switzerland's largest bank. Over the years, O'Connor spawned trading professionals who founded several Chicago hedge funds and big trading firms, including at Peak6 Investments LP, Getco LLC, Chicago Trading Co. and Wolverine Trading LLC.

It's an opportune time to start a hedge fund. Money directed to the funds rose 17 percent last year to $2.63 trillion as the industry posted its best annual returns since 2010, according to Chicago-based Hedge Fund Research Inc.

ZEN BUDDHIST NAME

Unlike some hedge funds that install various managers to pursue a variety of investment strategies, Satori's partners will pool their ideas for one fund, Mr. Excell said. “Satori,” a Zen Buddhist word for enlightenment or awakening, will hold long and short positions in stocks traded globally.

"What we think is important is having individuals with very different skills that source ideas from all over the marketplace,” Mr. Excell said in an interview.

Mr. Excell and the other veteran O'Connor executives exited UBS last year as the bank struggled to produce consistent profits. Since the recession struck, the bank has posted annual losses in four of the past six years. Mr. Excell wouldn't detail the circumstances under which the executives left UBS, but he hinted that they may have taken buyout packages.

Mr. Excell, who has been in the business for 23 years, most recently was a managing director at O'Connor and co-head of the firm's long/short equity market neutral fund. His Satori partners are former O'Connor execs John Kiple, who will lead trading; Mike Taylor, who will be head of fundamental research; and Chris Dardanes, who will manage analytics.